Question: The merchandise inventory was destroyed by fire on August 19. The following data were obtained from the accounting records: a. Estimate the cost of the

The merchandise inventory was destroyed by fire on August 19. The following data were obtained from the accounting records:

The merchandise inventory was destroyed by fire on August 19.

a. Estimate the cost of the merchandise destroyed.
b. Briefly describe the situations in which the gross profit method isuseful.

Jan. 1 Jan. 1-Aug. 19 Merchandise inventory Purchases (net) Sales (net Estimated gross profit rate 360,000 3,200,000 5,200,000 36%

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